An open position is a trade you still hold. It can be a long or a short in shares, indices, forex, crypto, futures or options. While a position is open, your profit or loss moves with the market and is usually shown as unrealised P&L.
Once you close or fully offset the exposure, the position becomes closed and the P&L turns realised. Until then, the position contributes to your risk, margin use and financing costs.
What counts as an open position?
You have an open position whenever you have positive or negative exposure to an instrument that has not been offset. Examples:
- Buy 100 shares in a company. You hold a long position until you sell those shares.
- Short 2 contracts of a stock index future. You are short until you buy back 2 contracts or the contract expires and is settled.
- Buy 1 call option. The call remains an open position until you sell it, it expires, or you exercise it.
Many platforms net multiple fills in the same instrument into one line with an average entry price. Others let you hold hedged lines, so you might be both long and short in the same market and each side shows as a separate open position. The exact behaviour varies by provider.
Partial closes keep the position open but reduce its size. Corporate actions can also affect open positions. For instance, a stock split adjusts quantity and average price, while option positions may be adjusted for special dividends according to exchange rules.
How open positions are shown and calculated
Most broker statements and platforms display columns such as instrument, side, quantity, average price, last price, exposure, market value, unrealised P&L and percentage return. Behind those columns sit a few simple calculations:
- Average entry price: a size-weighted cost across all fills still open.
- Unrealised P&L: for a long, (last price − average entry) × quantity × contract multiplier. For a short, reverse the sign.
- Exposure or notional: price × quantity × multiplier. In FX or crypto this may be converted into your account currency using a live rate.
- Percentage return: unrealised P&L divided by cost basis or margin, depending on the platform’s setting.
Costs and adjustments vary. Commission is usually realised when you trade, while funding, borrow fees and dividends on CFDs or short stock may accrue daily and appear as separate lines. Derivatives such as futures are marked to market, so gains and losses are settled daily to cash even while the contract remains open.
| Instrument | Side | Qty | Avg price | Last | Market value | Unrealised P&L |
|---|---|---|---|---|---|---|
| ABC stock | Long | 100 | £10.00 | £10.70 | £1,070 | £70 |
| Index future | Short | 2 | 4,000 | 3,980 | n/a | +40 per point × 20 = £800 |
For futures, market value is often shown as notional rather than an equity value, so the P&L per point times the move is the focus.
Opening, adjusting and closing a position
You open a position by sending an order that creates exposure. A buy order opens or increases a long, while a sell order opens or increases a short if your broker allows shorting in that instrument. Using a market order trades immediately at the best available quotes, while a limit order waits for your specified price. You can scale in with several orders over time and set stop loss and take profit instructions to manage risk.
To reduce or close a position, you trade in the opposite direction. Sell some or all of your long to cut or close it. Buy back part or all of your short to reduce or exit. For options, you typically use a close order that mirrors how you opened it. Partial exits realise some P&L and update the average price and size of what remains.
Positions can also end without a closing trade. Options may expire worthless or be exercised or assigned. Many futures are cash settled at a final settlement price if you hold through the expiry. Others require physical delivery, so traders usually roll the position into the next contract before the last trading day.
Unrealised vs realised P&L and why the difference matters
Unrealised P&L moves with every price tick. It turns into realised P&L only when you close the position or part of it. The split matters because unrealised gains can vanish if the market reverses, and unrealised losses can widen if volatility picks up or liquidity thins.
Imagine buying 500 shares at £5.80. The price lifts to £6.10, so your unrealised gain is £150. You sell 300 shares at £6.10 to bank £90. Your remaining 200 shares still show unrealised P&L based on the latest price, and your average price may update depending on the lot method your broker applies.
Margin, financing and overnight risk
If you use leverage, an open position ties up margin. Providers set initial and maintenance levels. If losses or fees reduce your equity below the maintenance level, you can face a margin call or automatic reductions in size. Financing charges may apply to leveraged cash equities, CFDs and some crypto venues. Short stock positions typically incur borrow fees and potential recall risk. Rules and costs vary by market and can change.
Holding positions overnight exposes you to gaps between sessions and to scheduled events such as earnings and economic releases. Stops may not fill at your level in a gap. Futures and many crypto markets trade nearly around the clock, which reduces gap frequency but not the risk of fast moves.
Common mix ups and related terms
- Open positions vs open interest: open interest counts how many derivative contracts exist that have not been closed or delivered. It is a market-wide figure. Your open positions are your personal exposures.
- Open position vs opening price: the opening price is the first trade of a session for a market, which is unrelated to whether you happen to hold a position. If you need the session’s first trade, see how platforms label the open on charts and quotes.
- Net vs gross: some accounts show net exposure per instrument, others break out both long and short sides. Hedged accounts can have multiple lines open in the same symbol.
In short, an open position is any exposure you still hold. It affects your risk, cash, fees and attention until you close or offset it.